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Thousands mass in Kiev to protest against the Ukrainian government's decision to spurn a trade pact with the EU (photo: dpa)

Ukraine – a defining moment for Europe

Thousands of pro-European Union Ukrainians have occupied central Kiev urging President Viktor Yanukovych to resign and allow the former-Soviet state to go ahead with its trade deal with the EU. As street protests escalate, there are echoes of Ukraine’s 2004 Orange Revolution. Ukraine remains a country on hold neither committed to Europe or to Russia – a stalemate which favours only its leader and his personalisation of power.

<i>The summit in Vilnius in November ended in a major defeat for the European Union. Following years of hard work putting together an Eastern Partnership, Brussels has come up short. Russian strong-arm tactics have convinced first Armenia and then Ukraine to abstain from signing Association and Free Trade Agreements. While European leaders give voice to anger and frustration, Moscow must question what it has achieved. It is faced with mass rallies in both Armenia’s capital Yerevan and Ukraine's Kiev. And it will have to pay a price in terms of an even further deterioration in relations with Europe. President Vladimir Putin may be basking in the glow of first having upstaged Washington over Syria and then dealt a snub to Brussels over Vilnius. But soon enough he will be brought round to realise that the latter may have been a truly Pyrrhic victory.</i>

THE FAILURE of the Ukraine government to sign a long-awaited trade pact with the European Union has sparked massive protests in the country's capital, Kiev.

The crisis has again exposed the East-West oscillation playing out in Ukraine between the EU and former Soviet master Moscow

Tens of thousands demonstrated outside the parliament building calling for the resignation of the government over its rejection of closer ties with the EU.

The crisis has again exposed the East-West oscillation playing out in Ukraine between the EU and former Soviet master Moscow.

Economic future

The EU warned that Ukraine is risking its economic future by rejecting the deal and focussing instead on enhancing ties with Russia.

Ukraine’s prime minister, Mykola Azarov has called for the protests to end, and appealed for Ukrainians not to return to the unrest of the Orange Revolution of 2004.

The trade pact was due to be signed at the Eastern Partnership Summit held in Vilnius, the capital of Lithuania, on November 28-29, 2013. On the agenda was also the initialling of association and free trade agreements with Armenia, Georgia, and Moldova.

The meeting had been heralded as a defining moment for Europe after years of preparation. Successful signing would have effectively blocked Russian ambitions to restore hegemony over former Soviet territory.

However, EU leaders have now to face the fact that they failed miserably. With only days to go, the government in Kiev had announced that it was pulling out. Western media overflowed with angry comments on how Russian strong-arm tactics and outright blackmail had forced Ukraine to abstain. The list of prominent European leaders who have given voice to their anger is long.

By preventing the formation of ties between Ukraine and Europe, Russia is closer to realising its own ambitions of enlargement. European frustration is made worse by the added facts that Armenia yielded to Russian pressure in September 2013, that Russian forces de facto occupy the two breakaway provinces Abkhazia and South Ossetia in Georgia, and that the ethnically Russian eastern part of Moldova - self-proclaimed as Transnistria - is a de facto Russian protectorate.

Major triumph

All in all, there would seem to be good reason to view the outcome of the meeting in Vilnius as egg on the face for Brussels and as a major triumph for Moscow. But is this really the case?

It is certainly true that Brussels has messed up its policy on Eastern Europe. Its relation to Moscow has been based on an ill-conceived notion that Russia must be brought to embrace Western values, which was a non-starter to begin with. And the EU’s relations to countries like those on the agenda at Vilnius have been based on seeking to block Russian influence while refusing to offer EU membership. The latter may, arguably, be viewed as even more ill-conceived than the, by now, totally defunct ‘partnership’ with Russia.

The causes of the failure can be traced back to the days when the then European Commission President Romano Prodi (1999-2004) talked of promoting a ‘ring of friends’ stretching from Murmansk to Marrakesh. As it became clear that his flowery rhetoric was devoid of real content, Brussels launched its vision of an Eastern Partnership (EaP).

The EaP was initiated by Poland and launched in 2009. It offered an institutionalised forum for discussion of trade and other relations with Belarus, Ukraine and Moldova, which all border on the EU, and with Georgia, Azerbaijan and Armenia that are located in the South Caucasus.

The ambition behind the EaP was to counter the Kremlin’s talk about the countries in its ‘near abroad’, or as ‘zones of privileged interest’. The reason why the EaP must now be viewed as a general failure is that the programme never offered more than a halfway house. The governments in the ‘near abroad’ had to consider that forging closer ties with Europe would invite retaliation from Russia, and that the EU would not be ready to compensate for severe disruptions in trade and in the flow of energy.

Mounting pressures

Belarus has long-since opted for partnership with Russia. Faced with mounting pressures to make a choice, Armenia and Ukraine have decided to pull back from Europe. Azerbaijan has never shown much interest in joining any side. And both Georgia and Moldova suffer from compromised sovereignty. It would seem there has been a major Russian triumph. But is this really the case? There are two good reasons to say no.

The first is that there will be a price to pay. The anger that is presently on display across the EU will take relations between Moscow and Brussels to an even deeper low, and Russia is more dependent on that relationship than is the EU.

One of the most outspoken critics of the Kremlin’s strong-arm tactics has been German Chancellor Angela Merkel, who did not mince her words when addressing the Bundestag just before the Vilnius meeting. Ms Merkel called on Russia to stop putting pressure on Ukraine, Georgia or Moldova in their attempts to move closer to the EU. ‘The countries decide on their own. No third country has a right to impose a veto,’ she said.

The days when Russia and Germany enjoyed a special relationship, conducive to partnership in projects like the Nord Stream gas pipeline that links the two countries, are now gone and will not be easy to restore.

A second reason to question who has emerged as a winner is that Brussels may just have dodged the bullet. If it had been successful in bringing Ukraine inside the tent, it would have had to contend with Russian sanctions against the Ukrainian economy, which is already in a sorry state. Being compelled to come to the rescue of Kiev would have produced further stress on an already overstressed financial situation within the EU.

Once Brussels has digested its humiliation, it may sit back and watch how Moscow deals with the fallout of its ‘victory’

Humiliation

Once Brussels has digested its humiliation, it may sit back and watch how Moscow deals with the fallout of its ‘victory’. There are two dimensions here.

One is that the governments in both Yerevan and Kiev have taken snap decisions that have been met by serious protests, not to say outrage from within their own countries. Images of heavy-handed riot police cracking down on Ukrainian protesters on Maidan Square in Kiev drives home that the further development of relations to Russia will be fraught with much conflict, and potential challenges to incumbent regimes.

Another - more serious - dimension is that by yielding to the Kremlin’s threats of economic sanctions, both Armenia and Ukraine are presently in positions where they may demand favours in return. This happens at a time when the Russian economy is heading for recession, and where pressures on the federal budget are already calling into doubt whether the government will be able to honour the promises made by President Vladimir Putin during his 2012 election campaign.

It is these economic realities that must now be placed in focus. Much as the EU has been pursuing a programme for ‘partnership’ in the east for which it is not ready to foot the bill, Russia has been pursuing a programme for enlargement of its own that it would not be able to support economically - should it succeed to get political acquiescence.

As one observer said: It would be the end of Putin’s Customs Union that he has formed with Belarus and Kazakhstan if he were to succeed in bringing Ukraine into the fold.

Moscow, paradoxically, finds itself in a situation that is similar to that of the EU. It has been pursuing a policy of expansion that is founded on a desire to prevent countries in its sphere of interest from making a ‘European’ choice, without seriously considering the costs of potential success.

Global influence

The driving force behind this ambition is deeply emotional. It goes beyond the desire to return Russia to a position of global influence. It is grounded in a powerful belief that Moscow is the natural and rightful heir to a tradition that dates back to ancient Rome and Constantinople. As frequently expressed by Mr Putin, it entails viewing Russians and Ukrainians as one people, with a common language and culture, and a denial that Ukraine has a right to independent statehood.

If Ukraine were to opt for closer association with Europe, it would end all this. Russia would be reduced to a non-European outlier, wedged in between Europe and Asia.

Moscow has certainly not shied away from using strong-arm tactics against other former members of the Soviet Union. Deputy Prime Minister Dmitry Rogozin was dispatched to warn the government in Moldova of the consequences should it opt for a deal with Europe. A pointed threat of interrupted gas supply was thinly veiled in a threat, ‘I hope you will not freeze during winter.’

Ukraine proved to be a harder nut to crack, but there was no doubt that Moscow was prepared to use all means to have its way. Mounting pressures during summer were followed by threats of a renewed gas war, and a blockade of imports from Ukraine. As the meeting in Vilnius approached, and Kiev seemed unwilling to yield, President Viktor Yanukovych was summoned to Moscow twice for meetings with President Putin that allegedly entailed open warnings that Russia was ready to de facto bankrupt its neighbour.

Now that Kiev has finally yielded to pressure, it is time to ask what Moscow would gain from a complete victory in the form of assimilation. A crowning achievement for Mr Putin would be having Ukraine first join the Russian-led Customs Union and then the envisioned Eurasian Union. But it would add such extra burdens to an already weakened Russian economy that it would simply be a Pyrrhic victory.

Economic mismanagement

The bitter truth that nobody really wishes to express is that following many years of severe economic mismanagement, Ukraine has turned itself into a poisoned pill that nobody really wants to swallow.

Ukraine is tragically busy carving out a role for itself as belonging to neither side

The sense of euphoria in 2005 in the aftermath of the Orange Revolution has been replaced by disillusionment and Ukraine fatigue.

The only party that has sufficient resources to support a genuine Ukrainian recovery is the EU. But to Brussels the thought of offering Ukraine full membership, with access to subsidies and membership of the EU, is outlandish. Even the less costly option of an association and free trade agreement was viewed by many as too much.

There are good grounds to argue that the only loser in Vilnius was the Ukrainian economy - and by implication the Ukrainian people. Looking towards the future, neither Brussels nor Moscow should harbour any illusions that anything has been settled. The defining feature is that the leadership in Kiev abhors having to join either side. Its preferred action is to continue its endless manoeuvering, seeking maximum gain for minimum sacrifice.

The current crisis was provoked by the EU, which linked signing of an association agreement to concessions from Kiev that the government was not ready to accept. The ultimatum to release the former prime minister, Yulia Tymoshenko, from prison - she was viewed by the EU as a political prisoner - was unacceptable. President Yanukovych made it quite clear that looking towards the presidential election in 2015, his darkest nightmare is to have Ms Tymoshenko at liberty.

It is somewhat paradoxical that the deal between Kiev and Brussels would likely have been scuppered even without Russian pressure. As matters now stand, Moscow is taking the main heat from problems that are overwhelmingly rooted in Kiev itself.

The coming years are likely to be dominated by headaches both for the EU and for the IMF as Kiev returns with demands for assistance for its battered economy. Moscow may, on its side, look forward to permanent trouble over Ukrainian inability/unwillingness to pay its energy debts, and to constant prevarication over whether Kiev will join the Customs Union.

Hold on power

Underlining all decisions is Mr Yanukovych’s fear of any moves that may place his own hold on power at risk. His unwillingness to opt for closer relations with either Brussels or Moscow is also clearly supported by the country’s business elite, the notorious oligarchs. They fear both the openness and demands for legality that would be associated with closer relations to the EU, and the competition from Russian counterparts, who are more proficient at their own games, which would follow from closer integration with Russia.

Ukraine is tragically busy carving out a role for itself as belonging to neither side. Violent street protests are likely to continue, and the government is likely to fall. Perhaps it may even prove impossible for Mr Yanukovych to be re-elected in 2015. But none of this is likely to change the basic political problem of its insistence to manoeuvere between Europe and Russia.

Ukraine facts

  • Ukraine pulled out of the EU’s Eastern Partnership signing due to take place at Vilnius, November 28-29, 2013
  • In August 2013, three months before the deal-signing with the EU, Russia stopped all Ukrainian imports
  • After the signing was put on hold, mass protests took place in the Ukraine capital Kiev calling for the resignation of President Viktor Yanukovych
  • Inhabitants in Ukraine’s Russian-speaking east are unconvinced that their country’s future lies in Europe. Many Ukrainian firms rely on sales to Russia
  • President Yanukovych pledged, on December 2, 2013, to re-engage with Brussels. Commission President Jose Manuel Barroso agreed, but stressed the Commission was ready to discuss implementation of accords already initialled, ‘but not to reopen any kind of negotiations’
  • Mr Yanukovich visited in China on December 3, 2013, for talks on billion-dollar loans and investments that could shore up the country’s ailing economy
  • Ukraine is in recession. Its precarious finances are one important difference between today’s mass protests and the 2004 Orange Revolution which followed strong economic growth
  • World prices for steel – its main export – are low. Ukraine pays among Europe’s highest prices for Russian gas which households receive heavily subsidised by the government
  • Ukraine faces US$15bn in debt repayments over the next two years
  • It remains unclear whether Ukraine would have to join President Vladimir Putin’s Customs Union to extract help from Russia
  • Another round of talks between Ukraine and the EU is scheduled for March 2014. This will be two months before Belarus, Russia, and Kazakhstan will have a document ready to sign to join the Eurasian Economic Union - the extended version of the Customs Union
  • Ukraine population: 47 million
  • Capital Kiev – population 2.6 million
  • Language: Ukrainian, Russian, Romanian, Polish, Hungarian
  • GDP per capita: US$4,500
  • Viktor Yanukovych, 63, became prime minister in November 2002 but was ousted from power by the 2004 Orange Revolution
  • Mr Yanukovych returned as prime minister in 2006-07 and won presidential election in 2010

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